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Modified Internal Rate of Return (MIRR) – Basics, Formula, Calculations in Excel (Step by Step) [Video]

Modified Internal Rate of Return (MIRR) – Basics, Formula, Calculations in Excel (Step by Step)

Modified Internal Rate of Return (MIRR) Tutorial – Chapters
00:00 – Introduction
01:10 – What is MIRR?
01:57 – Multiple IRR Problem
04:23 – Overestimate of Rate of Return
09:10 – Calculating MIRR
10:03 – MIRR Formula
11:55 – MIRR Excel Function

In this video, we will talk about MIRR, its calculations, how it tells the limitations of IRR, and its uses.

What is Modified Internal Rate of Return (MIRR)?
MIRR or Modified Internal Rate of Return accurately assesses the potential profits of an investment. Unlike IRR, which exaggerates and entices investors for investment, MIRR offers a better estimate of the expected ROI of an investment.

It can be calculated through:
– Discounted Approach
– Reinvestment Method
– Combination Approach

Uses of MIRR:
– Eradicates the issues of multiple IRRs and overestimation of the rate of return
– Allows adjustments for growth
– Adds reinvestment rates

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For more details, you can refer to our article at – https://www.wallstreetmojo.com/mirr/

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Resources for Accountants

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